4 Financial Benefits of Residential Solar Panels

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Investing in solar panels for your home is one of the smartest financial and eco-conscious decisions that you can make in 2020.

In the simplest terms, a solar panel is a device that transforms sunlight into electricity. Energy harvested from the sun is clean and pure, and utilizing solar panels is an environmentally friendly alternative to traditional electricity, which is sourced from fossil fuels (coal and natural gas), and have a significant impact on water resources, as well as our atmosphere.

According to the Environmental Protection agency, the burning of natural gas, coal, and oil for electricity and heat is the largest single source of global greenhouse gas emissions. By utilizing renewable energy from the sun, you are reducing your carbon footprint and joining in a collective effort to reduce greenhouse gas and CO2 emissions.

How much does a typical residential solar electric system cost?

A typical solar system will cost the average home owner around $15,000 – $25,000 dollars. However, don’t that let the price discourage you from switching to solar power, because those numbers will decrease significantly once you apply a little something called the Incentive Tax Credit (ITC), otherwise known as the Federal Solar Tax Credit, which we’ll go over in the next few paragraphs.

Can Solar Panels Be Installed DIY To save Money?

Absolutely! Many homeowners are more than capable of installing their own solar panels, which will save them thousands of dollars in addition to receiving the Incentive Tax Credit. However, there are several minor drawbacks to DIY such as taking the time to file for appropriate permits and doing research on the best equipment and accessories that are necessary for a successful install—something that contractors are readily familiar with. But, if you are willing to take the time and do the research, there is nothing wrong with DIY, which will save you watts of cash–pun intended.

If you’d like to learn more about Solar panels and what essential components are necessary for installation, check out this book by Micah Toll, titled “DIY Solar Power: How To Power Everything From The Sun”. Not only will you learn what items are necessary for install, it’ll also teach you how to build your own solar panels, and how to place them on your home, as well as off-the grid vehicles.

Financial Benefits

Tax Deductions

Now it is time to discuss solar incentives. As I have mentioned previously, installing solar panels on your home will make you eligible for the solar tax credit, which will allow you to deduct 26 percent off of the installation cost from your federal taxes. With that said, the percentage will drop in 2021 to 22 percent, and will no longer be available to residential homeowners beginning 2022. Only commercial properties will be allowed to claim a fixed 10 percent. So if you’re serious about installing a solar energy system on your home, now is that time to do it.

Electric Bill Savings

According to the U.S. Energy Information Administration, (EIA), the average price for residential electricity as of February 2020 is $12.85 per kWh. As a result, the average American ends up paying more than a thousand dollars per year, on electricity alone. And those who reside in hotter than average states such as Arizona, pay even more. No wonder solar panels are becoming more appealing.

So just how much can you save with solar panels? Depending on sunlight abundance and solar system size (which is typically 6 kilowatts), the average homeowner can experience annual savings of up to 2,000 dollars. That’s pretty impressive.

Long-Term Value & Personal Savings

Solar panels have incredibly long life spans (about 25-30 years on average), and with lower monthly utility bills, you will be able to place more money into your personal savings account or IRA–especially for retirement. With that said, the panels pay for themselves and provide peace of mind.

Increase In Home Value

One of the biggest concerns regarding solar panel installation and investing all that money is a potential need to sell your home; and that is a perfectly understandable concern that many people have. Luckily, you don’t need to worry, because installing a solar panel system significantly increases the value of your home. In fact, a study conducted by the Lawrence Berkeley National Laboratory, found that, on average, solar panels increase your home’s value by a little over $14,000. So, if and when you do decide to put your home on the market, the amount of money that you spent on panels will essentially be reimbursed.

Conclusion

Solar Power is amazing, and provides several solid financial benefits. And remember, if you want want to claim the solar incentive deal, the time to act is now! The percentage will drop again the following year, and eventually be unavailable for homeowners.

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